The News Review:
- 60-Second Guide to Smart Refinancing
- McCain Warns Against Hasty Mortgage Bailout
- Maine’s mortgage crisis not so visible, but all too painful
- Almost $13 million bilked in alleged mortgage swindle
- Federal Housing Finance Board acts to expand funding pool for…
- Clinton pours a foundation
- Will a key interest rate cut make a difference in the sluggish…
60-Second Guide to Smart Refinancing
Motley Fool – Mar 25, 2008
This rule of thumb overlooks several important factors, such as:
The difference between how much faster (or slower) you’ll pay off the new loan versus the old one. The amount of interest you could have earned on the money used to refinance — or, conversely, what you might earn on your savings from refinancing. Whether you’re rolling the costs of refinancing into your new mortgage. Doing so reduces your savings, because you’ll pay interest on that amount. Any pre-payment penalties — usually anywhere from one to three years — that would force you to pay as much as 3% of the original loan amount for an early exit. None of these factors might be a deal-breaker, but they are important to include in your cost calculations if you want to be smart about refinancing. 0:12: Decide whether an ARM still fits your lifestyleAfter all of that ARM wrestling, the choice of whether to refinance into a fixed-rate mortgage, get another ARM, or stay put comes down to how it meshes with your financial lifestyle.
McCain Warns Against Hasty Mortgage Bailout
New York Times – Mar 25, 2008
As the mortgage crisis has rippled through the economy, it has thrust itself to the forefront of the presidential race. McCain’s remarks on Tuesday represented a stark tonal shift from the increasing calls for helping homeowners, as he faulted not only borrowers who engaged in risky lending, but suggested that some homeowners engaged in dangerous financial practices. “Some Americans bought homes they couldn’t afford, betting that rising prices would make it easier to refinance later at more affordable rates,” he said… McCain’s remarks on Tuesday represented a stark tonal shift from the increasing calls for helping homeowners, as he faulted not only borrowers who engaged in risky lending, but suggested that some homeowners engaged in dangerous financial practices. “Some Americans bought homes they couldn’t afford, betting that rising prices would make it easier to refinance later at more affordable rates,” he said. McCain argued that even during the ongoing crisis, the vast majority of mortgage holders continued to make their payments. “Of those 80 million homeowners, only 55 million have a mortgage at all, and 51 million homeowners are doing what is necessary — working a second job, skipping a vacation and managing their budgets to make their payments on time,” he said. “That leaves us with a puzzling situation: how could 4 million mortgages cause this much trouble for us all?” Mr.
Maine’s mortgage crisis not so visible, but all too painful
Central Maine Morning Sentinel – Mar 25, 2008
MURPHYBlethen Maine NewspapersMaine isn’t the kind of state where a drive through a large subdivision reveals home after home up for foreclosure sale. Instead, the foreclosure problem in Maine reflects the spread-out nature of the state — a house here, another there, a few more a couple of miles away. But the lack of visibility doesn’t blunt the impact of the mortgage crisis that has washed over Maine, much as it has the rest of the country. Nearly a quarter of Mainers with subprime mortgages — the type of loans extended to people with less attractive credit histories — are at least 60 days behind in their house payments. And nearly one in eight subprime borrowers is in foreclosure, the months-long, agonizing process of losing a home. Mainers with good credit histories and prime loans also are falling behind on mortgages and facing foreclosure at a much higher rate than in the past. The increasing pace of foreclosures is a symptom of an ailing economy… Other documents might refer to a “conventional” loan, she said, which is commonly thought to be a fixed-rate mortgage, but has no meaning legally. Wentworth is a Molleur client who still hopes to save her home, despite daunting obstacles. She said she and her husband, Norman, refinanced their home four years ago. Their payments, initially $1,200 a month after refinancing, re-set to $1,500 after two years and are now jumping to $2,000 a month after another adjustment. The lender, which she declined to name because she’s still trying to negotiate a workout plan, indicated Wentworth would be able to refinance before the rate started jumping, but the couple’s income was pinched when her husband lost his job at an auto parts store. Wentworth only recently made a partial payment on what she owes, the first payment she’s been able to make since October. Bills for oil and a car loan — a second car was given up shortly after the couple filed for bankruptcy — are piling up, she said, Filing for bankruptcy has slowed things down, she said, and if the Wentworths hadn’t taken that step, “we would have lost it all,” she said.
Almost $13 million bilked in alleged mortgage swindle
San Francisco Chronicle – Mar 25, 2008
tmpl –>(03-25) 04:00 PDT Sacramento –Federal prosecutors on Monday announced indictments in a mortgage scheme that victimized more than 100 homeowners and siphoned off nearly $13 million in home equity. html —- –> Get Quote… Under the scam, homeowners facing foreclosure were promised lower house payments and even cash up front to help pay bills if they agreed to add another name to their home’s title. The victims were led to believe they were paying rent to the investor while they got their finances back in order. According to the unsealed indictments, Head and the others actually used the scheme to switch the names on the titles, take control of the homes, refinance them and walk away with whatever equity homeowners had built up. If convicted, Head faces up to 20 years in prison. The others, including his friends and members of his family, face up to 15 years. Head is in custody in Southern California awaiting transfer to Sacramento and does not yet have a lawyer. Prosecutors say additional indictments are likely as they continue investigating the brokers, loan officers and banks that did business with Head Financial Services.
Federal Housing Finance Board acts to expand funding pool for…
Sacramento Bee – Mar 25, 2008
It lent $800 billion last year. Banks no longer hold most home loans on their books. Instead, they sell the loans into a secondary mortgage market, where they’re bundled with other home loans and sold as bonds to investors. This process is called securitization, and much of it is done by Fannie Mae and Freddie Mac. When the nation’s housing market began skidding in late 2006, investors’ appetite for mortgage bonds dried up. Banks, credit unions and thrifts have been stuck with loans or have been unwilling to underwrite much new mortgage lending because home loans can’t be securitized easily when there aren’t willing investors. “The lack of investment in mortgage-backed securities has exacerbated the credit crunch for families looking to buy homes, as well as for existing borrowers looking to refinance into more affordable loans,” Kieran Quinn, the president of the Mortgage Bankers Association, said in a statement welcoming Monday’s action… When the nation’s housing market began skidding in late 2006, investors’ appetite for mortgage bonds dried up. Banks, credit unions and thrifts have been stuck with loans or have been unwilling to underwrite much new mortgage lending because home loans can’t be securitized easily when there aren’t willing investors. “The lack of investment in mortgage-backed securities has exacerbated the credit crunch for families looking to buy homes, as well as for existing borrowers looking to refinance into more affordable loans,” Kieran Quinn, the president of the Mortgage Bankers Association, said in a statement welcoming Monday’s action. Federal Home Loan Banks have accepted these home loans as collateral for short-term loans ranging from months to two years or longer. The mortgage bonds remain on the balance sheets of the institutions that offer them as collateral. But these banks, credit unions or thrifts are still able to borrow to obtain cash for new lending while they wait for the housing crisis to pass and investors’ interest to return. “The home loan bank gives them an outlet of sorts,” explained Stephen M.
Clinton pours a foundation
Denver Post – Mar 25, 2008
” The centerpiece is the $30 billion fund. If the Federal Reserve can help Bear Stearns address its financial problems, Clinton said, referring to last week’s effort to keep the Wall Street firm from collapsing, “the federal government should provide at least that much emergency assistance to help families and communities address theirs. ” Obama, too, has proposed a fund, a $10 billion plan to help people refinance their mortgages and offer other aid. Clinton’s plan also would aid mortgage firms that, she said, are “reluctant to help families restructure their mortgages because they’re afraid of being sued by investment banks, the private-equity firms and others who actually own the mortgage papers. ” She plans to introduce Senate legislation that would give mortgage companies protection against such lawsuits. Dorpalen of ACORN Housing said that was a useful suggestion. Too many lenders, he said, “are worried that two years down the road they’ll get sued by vultures, predatory lenders or hedge funds.
Will a key interest rate cut make a difference in the sluggish…
WHAS 11.com – WHAS 11.com (subscription) – Mar 25, 2008
The prime rate increases and decreases the same amount as the federal funds rate does. com user comments It allowed us to refinance our mortgage, lowering our monthly payments, and saving us appoximately $30,000 over a 15 year period (before refinancing, we were to pay a higher payment for 17. Interest rate cuts led us to refinance our mortgage, saving us money every month and shortening the length of time it will take to pay off our mortgage, overall, saving us about $30K over the life of the loan. (15 yr loan) I live in San Diego, we are middle class, have $100,000 income but we are not able to buy an average house which is $450,000. I am dreaming that the mortgage interest rate will come down and houses will come down to $350,000 I will buy immediatly a house and can cope with the increase and infalation of the cost of living.